DG Khan Cement returns to full-year profit on costs, prices

DG Khan Cement returns to full-year profit on costs, prices
Published: 17 September 2009

DG Khan Cement Ltd, Pakistan’s second-biggest producer, returned to a full-year profit as coal costs declined, prices increased and a weakening local currency boosted the company’s revenue from overseas.

Net income was PKR525.6m (US$6.3m), or 1.96 rupees a share, in the year ended June 30, compared with a loss of PKR53.2m, or 0.21 rupee, a year earlier, the Lahore-based company said in a Karachi Stock Exchange statement today. Sales rose 45 per cent to PKR18bn.

The rupee depreciated 20 percent during the year, raising the value of the Lahore-based company’s sales to Afghanistan and the Middle East. Coal prices retreated from a record in June last year, while Pakistani cement makers increased prices by almost half during the year.

“The decent revenue growth supported the company,” said Rehan Khan, a research analyst at First Capital Equities Ltd. in Karachi, who has a “buy” recommendation for the stock. “Cement makers are set to benefit as construction activity improves in the country.”